Just how bad is it? Well, that depends

By David Nicklaus

ST. LOUIS POST-DISPATCH

12/24/2006



If the numbers are to believed, the St. Louis economy has had a subpar year.



According to the Bureau of Labor Statistics, the metro area created only 2,500 jobs between October 2005 and October 2006, a meager increase of 0.2 percent. That's significantly below the national job-growth rate, which was 1.5 percent for the same 12 months. It's also much worse than the local economy was doing a year ago, when we showed a respectable gain of 14,200 jobs.



What's more, the local slowdown is spread across almost every industry. The once fast-growing business-services sector added just 100 jobs in the latest 12 months, and health care just 700. That's not enough to overcome the 8,100 jobs lost in the manufacturing and retailing industries, which suffered the closing of a Ford plant and layoffs at the former May Department Stores offices.



This year did bring some good news about the local economy. Isle of Capri Casinos brought its headquarters, with 150 jobs, to Creve Coeur, and Fireman's Fund Insurance added 190 jobs in Earth City. Home-grown companies like Enterprise Rent-A-Car and Edward Jones continue to add employees. Overall, the metro area has registered 27 straight months of job gains.



The problem is that, of late, those gains have become razor thin.



"It's definitely something we need to keep an eye on," says Russell Signorino, a labor-market expert and vice president at the United Way of Greater St. Louis. "Twenty-five hundred jobs over a year ago is not enough to keep the economy moving forward. That means we won't be able to absorb the new people entering the labor market, and also people who become unemployed and are looking for new jobs."



The local unemployment rate, based on a different government survey, stood at 4.9 percent in October, up from 4.8 percent a year earlier.



Some local experts, meanwhile, are skeptical about that low job-growth number. It comes from a monthly tally of employers called the payroll survey, which some economists think misses a lot of newly formed businesses.



The survey has been subject to huge revisions in the past. A national revision in August added 800,000 jobs to the earlier count. Two years ago, flawed statistics made St. Louis look like one of the nation's hottest growth markets. Then, in March 2005, a revision erased 26,000 local jobs and sent us back to the middle of the pack.



Another revision is due in March. Howard Wall, an economist at the St. Louis Federal Reserve Bank, has a hunch that the St. Louis numbers will be revised upward this time. The near-zero growth rate "is a bit different from what we've been hearing when we go out and talk to people for our beige book survey," he said.



That sampling, an unscientific effort, consistently has found more St. Louis employers planning to expand than to contract.



Bryan Bezold, chief economist for the St. Louis Regional Chamber & Growth Association, finds similar optimism in a survey he posts on the group's website.



In the latest version, 64 percent of employers say they plan to add workers, while only 2 percent expect layoffs. "The survey and other anecdotal evidence seem to be painting a brighter picture than the employment numbers do," Bezold said.



So perhaps it is too soon to worry about a dry, volatile government statistic. But if the March revisions come and go without significantly boosting St. Louis' job-growth rate, we clearly have a problem.

St. Louis lost jobs in November

By David Nicklaus

01/04/2007 10:14 am

When I wrote in a recent column that St. Louis was having a subpar year in job creation, the numbers for November weren’t out yet. Well, they’re out now, and St. Louis’ economy looks even worse. Instead of the microscopic growth rate that we showed in October, the Bureau of Labor Statistics now says the metro area SHRANK by 3,300 jobs between November 2005 and November 2006. If these preliminary numbers hold up, they end a string of 27 straight months in which St. Louis posted year-over-year job gains.



Our unemployment rate actually fell slightly, to 4.8 percent in November, because fewer people were seeking work. The local jobless rate was 4.9 percent in October and 5.2 percent in November 2005.



As the column points out, these numbers are sometimes subject to big revisions. But they’re beginning to make me worry about the health of the local economy.

Metro area loses jobs, but number may be revised upward later

By Gail Appleson

ST. LOUIS POST-DISPATCH

01/05/2007



Government statistics showed that St. Louis suffered the country's second-worst number of job losses for the year ended in November, but local experts questioned the accuracy of the figure and said employment figures might show a slight increase when revised.



On Wednesday, the U.S. Bureau of Labor Statistics reported that the St. Louis metropolitan area lost 3,300 jobs. While St. Louis came in second nationally, the estimated loss here was dwarfed by the 26,400 jobs that disappeared in the Detroit area. The report said Flint, Mich., was third with the loss of 3,100 jobs.



While it might sound like depressing news for St. Louis, Russ Signorino, vice president of research for United Way and a former labor-market analyst for Missouri, said the sample used to determine the statistics might be misleading. He said the government would release a revised figure in February.



"I would be surprised if, after revisions, the 3,300 still shows up," he said. "You'll probably see that it's level or possibly going up a bit."



The reason, he explained, is that the government's statistics come from a sample of information voluntarily submitted by some businesses in the St. Louis area.



Because the government does not require companies to provide these statistics, many small and medium-sized employers in the area do not want to incur the expense of reporting. This means that figures supplied by larger companies can have an undue impact on the sample.



Therefore, layoffs that resulted from Federated Department Stores Inc.'s purchase of May Department Stores Co. and the idling of the Hazelwood assembly plant by Ford Motor Co. could make the employment picture here seem worse than it actually is.



"If the sample is over-represented in a certain area, the estimate you're making could be an overstatement about what's happening in the economy," Sig­norino said.

Revision brightens area labor statistics

By David Nicklaus

ST. LOUIS POST-DISPATCH

03/09/2007



With a few clicks of government statisticians' keyboards, the economic picture in St. Louis has gone from dark gray to partly sunny.



A revised estimate issued Thursday by the Bureau of Labor Statistics says the metro area added 13,600 jobs last year, a growth rate of 1.0 percent. That's less than half of the nation's 2.2 percent growth rate, but it's a big improvement over where the region thought it stood a few weeks ago.



The BLS' original estimate, published in late January, had the St. Louis area losing 400 jobs in 2006. That made it one of just three large metropolitan areas, along with Detroit and Cleveland, that failed to create jobs last year.



Several local economists had questioned the original figure. They didn't think things were all that bad, and Thursday's revisions proved them right. Howard Wall, an economist at the St. Louis Federal Reserve Bank, said the original numbers showed a local economy that "just fell off the table" in the final three months of 2006. The revision, he said, "takes away the bad news, and makes it more like our usual pattern. The economy's growing as the national economy is, but at a slower pace."



Each month, the BLS polls about 160,000 businesses and government agencies, and uses their responses to estimate how many jobs have been added or subtracted at the nation's 8.8 million employers. But the universe of employers changes constantly. The government eventually learns about firms opening or closing through unemployment insurance records, which it uses to update or "benchmark" its job estimates every March.



The BLS now says the business-services industry, for example, added 6,300 jobs in St. Louis last year. Its initial estimate for the industry showed a loss of 400 jobs. Wall says that sector has been responsible for big revisions before.



"If you think about it, it's a lot easier to start a company in professional and business services than in manufacturing," said Bryan Bezold, an economist at the St. Louis Regional Chamber & Growth Association. "These are things like lawyers, accountants and consultants setting up their own firms. And that's where the biggest source of the revision was."



The revision also showed a bigger increase in education and health care services, and a smaller loss of manufacturing jobs, than originally estimated. Manufacturing remained one of the local economy's weak spots, with a loss of 3,200 jobs in a year that saw the closing of Ford's plant in Hazelwood.



One bright spot was scientific research and development, a category that has only about 8,000 workers here but showed 9 percent growth in 2006 and 20 percent in 2005. "It's a small part of our overall economy but a big part of the growth," Bezold said.



The new numbers aren't quite the last word on how the St. Louis economy performed in 2006. They'll be revised again a year from now, and for some years, such as 2002 and 2003, that second revision has been bigger than the first.



For now, though, the St. Louis economy seems to be in a predictable pattern. Job growth has been about 1 percent for three consecutive years.



That pattern is both good news and bad news. We managed to grow last year despite major layoffs at Ford and the former May Department Stores. But we didn't grow very much, and at best the revision moves our economic grade from an "F" to a gentleman's "C." Over the long run, that isn't nearly good enough.